Trump’s 50% copper tariff ignites race to build new copper mines in US
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The United States imposed a 50 percent tariff on all imported copper, citing national security. President Trump invoked Section 232 of the Trade Expansion Act, previously used for steel and aluminum, to justify the measure. The policy is intended to stimulate domestic production and reduce dependence on countries like Chile, Peru, and China.
Markets reacted immediately. US copper futures surged about 13 percent, reaching nearly $5.90 per pound. Traders began redirecting global supply to accommodate the newly protected US market. This created a growing premium between US and international copper benchmarks.
The tariff is part of a broader strategy to rebuild manufacturing capacity in critical sectors. Copper plays a key role in electric vehicles, renewable energy, defense systems, and telecommunications. By targeting copper, the administration highlighted the material’s importance in long-term industrial strategy.
Arizona’s Santa Cruz mine becomes a national test case
Ivanhoe Electric is leading the domestic response with its Santa Cruz copper project in Arizona. Located in a historically rich mining region, Santa Cruz may become the first large-scale US copper mine developed in more than 10 years.
The company plans to begin construction in early 2026, aiming to produce copper by 2028. Santa Cruz is expected to yield around 72,000 tons annually for 15 years. Ivanhoe will use heap-leach processing, which avoids the need for domestic smelting. This method reduces cost and bypasses capacity constraints in the US refining sector.
The project is already being viewed as a template for future development. If successful, it could accelerate similar efforts across the Southwest, where copper deposits are significant but underutilized.
Global ripple effects and the fight for copper supply
Tariffs have disrupted global trade. Chile, Mexico, and Canada are seeking exemptions, citing economic and security partnerships. The US has not ruled out granting relief, though criteria remain vague.
Producers from these nations are reviewing supply routes and may redirect exports toward Europe or Asia. For US manufacturers, this could mean higher input costs or supply constraints in the short term.
As trade flows shift, futures markets are adjusting. Traders are renegotiating contracts and building new risk models. The copper market, often seen as a barometer for global industry, now reflects the influence of geopolitical maneuvering.
Economic realities: Can domestic mining meet the moment?
Building new copper mines in the US is not without challenges. Smelting infrastructure is limited. Permitting processes are slow. Workforce shortages persist in key mining regions. Construction costs have also climbed in recent years.
Some industry voices, including Ivanhoe Electric’s co-chair Robert Friedland, support the tariffs. They argue the policy is a necessary first step toward long-term resource security. Others point to the risk of price inflation, particularly for industries that depend heavily on copper.
Economists warn that without coordinated investment in smelting and infrastructure, tariffs alone may fail to deliver self-sufficiency. Rising costs could be passed on to sectors like construction and consumer electronics.
Copper could be the first of several commodities targeted by similar trade policies. The legal precedent set by Section 232 allows for protective tariffs on materials deemed essential to national security.
This strategy aligns with international trends. Several countries have begun asserting tighter control over strategic materials. The US is now joining that shift with a more proactive industrial policy.
Santa Cruz is a test of whether industrial goals can align with private capital, environmental oversight, and public support. The outcome could influence future policies on materials like lithium, cobalt, and rare earths. Whether it succeeds will shape the trajectory of US economic planning for years to come.
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